Tesla shares plunge 14% after Goldman sets new price target

By selling Zero Emission Vehicle credits earned from the sale of its Roadster in California, Tesla Motors earned $12 million. Large automakers must hit ZEV sales and production targets, but buying credits can give them some flexibility.

Goldman Sachs analyst Patrick Archambault, in a broader research note on the automotive sector published earlier today, offered three different growth scenarios for Tesla and set a six-month price target of $84 a share, up from $61, previously. He left unchanged his "neutral" rating on the stock.

Tesla's shares plunged 14.3 percent, or $18.21, to close at $109.05 on Nasdaq. Through Monday, the stock had nearly quadrupled so far this year. Earlier this month, Nasdaq said that Tesla's shares would be listed on the Nasdaq 100 index to reflect the company's rising profile.

If the stock closes at this level, it would be the largest one-day drop since Jan 13, 2012, when it fell nearly 20 percent.

In one case, Archambault sees CEO Elon Musk's company selling 105,000 cars, including the Model S and a future smaller sedan, with 14.6 percent operating margins and earnings of $5.99 a share. In the second scenario, he sees 150,000 sales, 14.8 percent margins and earnings per share of $8.59. The most bullish scenario was for 200,000 sales, 15.2 percent margins and $11.69 in earnings per share.

In averaging out the three scenarios, Archambault came up with the new price target of $84, which is far below the current price.

Speaking more broadly about the auto sector, Archambault said auto stocks have underperformed the S&P 500 index by an average of 26 percent in three of the last four tightening economic periods. He said the sector has historically peaked 65 percent of the way through an expansion.

Archambault said he was now focused on General Motors Co. and Ford Motor Co. "Both ... have strong product driven growth stories in multiple regions," he said in the note.

Archambault rates both stock as "buy," but sees stronger near-term catalysts for GM's share, including the rollout of profitable full-size pickup trucks boosting margins in the second half of 2013, and the possibility of a common dividend by year end.